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The call presented a balanced but overall constructive picture: management demonstrated strong operational discipline (reduced finished spec inventory, progress toward higher build-to-order mix), maintained a substantial land pipeline, preserved strong liquidity (net debt effectively zero) and prioritized shareholder returns through buybacks and dividends. Offsetting these positives were near-term margin pressures driven by elevated incentives (10.9% of sales price), year-over-year declines in revenue and EPS, weaker Financial Services results, and some remaining spec exposure and land impairments. Management reaffirmed full-year guidance and communicated a path for margin recovery in the back half of the year.
PulteGroup reaffirmed full-year 2026 guidance of 28,500–29,000 closings and ASP of $550,000–$560,000, with Q2 closings pegged at 6,700–7,100 and Q2 ASP $540,000–$550,000; they expect Q2 gross margin to be the low point at 24.1%–24.4% with full-year gross margin guided to 24.5%–25% (Q1 was 24.4%), homebuilding SG&A targeted at 9.5%–9.7% of home sale revenues for the year, an expected effective tax rate of ~24.5%, and incentives elevated (Q1 incentives were 10.9% of gross sales price). Operational and capital assumptions include 3%–5% year-over-year community count growth in remaining months, $5.4 billion of 2026 land acquisition and development spend (they invested $1.3B in Q1), roughly $1 billion of expected 2026 cash flow generation assuming that land spend, 229,000 lots controlled (≈35,000 owned/finished), Q1 backlog of 10,427 homes ($6.5B), 14,090 homes in production (6,349 specs, specs = 45% of WIP; 1,515 finished specs ≈ 1–1.5 finished specs per community target), and continued share repurchase capacity (Q1 repurchases $308M; additional $1.5B authorization bringing availability to $2.1B).
Ended Q1 with $1.8 billion in cash and a net debt-to-capital ratio effectively zero; repurchased 2.4 million shares for $308 million in Q1 and announced an additional $1.5 billion share repurchase authorization (total availability $2.1 billion); returned $360 million to shareholders in the quarter through repurchases and dividends.
Net new orders increased 3% year-over-year to 8,034 homes worth $4.6 billion; average community count rose 9% to 1,043 communities; backlog at quarter end was 10,427 homes valued at $6.5 billion.
Build-to-order homes accounted for 43% of net new orders (up from 40% a year ago); finished spec inventory reduced by ~24% (down nearly 500 homes) over the past 90 days to an average of 1.4 finished specs per community (inside target range of 1.0–1.5).
Orders in Florida grew 18% year-over-year, contributing materially to net new orders growth; management highlighted improving new and existing inventory dynamics in Florida and strong local land positions and leadership teams.
Reported Q1 gross margin of 24.4% and Q1 EPS of $1.79; management reaffirmed full-year guidance including closings of 28,500–29,000 homes and full-year ASP guidance of $550,000–$560,000, and gross margin guidance of 24.5%–25% (likely toward lower end).
Invested $1.3 billion in land acquisition and development in Q1 (split evenly between acquisition and development); control approximately 229,000 lots (including ~35,000 owned and finished lots) to support future growth.
House costs declined 5% year-over-year to $75 per square foot, led by lower lumber prices and procurement savings across building products and services; company expects house costs to be flat to slightly down for the remainder of the year.
Net Promoter Score (measured one year after delivery) rose to 65, placing the company alongside high-service consumer brands; company ranked among Fortune 100 Best Companies to Work For for the sixth consecutive year.
Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the PulteGroup, Inc. Q1 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to withdraw your question, please press 1 again. Thank you.
I would now like to turn the call over to James Zeumer, Vice President of Investor Relations. Please go ahead.
Thank you, Kelvin, and good morning. I want to welcome everyone to today's call to review PulteGroup, Inc.'s operating and financial results for our first quarter ended 03/31/2026. Joining me on today's call are Ryan Marshall, President and CEO; Jim Ossowski, Executive Vice President and CFO; and David Carrier, Senior Vice President, Finance. In advance of this call, a copy of our Q1 earnings release and this morning's webcast presentation have been posted to our corporate website at pultegroup.com. We will also post an audio replay of this call later today. I would highlight that today's presentation includes forward-looking statements about the company's expected future performance. Actual results could differ materially from those suggested by our comments made today. The most significant risk factors that could affect future results are summarized as part of today's earnings release and within the accompanying presentation.
These risk factors and other key information are detailed in our SEC filings, including ou...